Review Standards for Reorganizations

(1) Grounds for Approval of Reorganizations. The Commissioner may approve a proposed mutual holding company reorganization pursuant to 209 CMR 33.21 through 33.30 if: (a) the formation of the mutual holding company will be fair and not prejudicial to the depositors of the mutual banking institution seeking to reorganize; (b) the public interest will be served by the formation of the proposed mutual holding company; (c) approval will not result in unsafe or unsound banking practices; (d) the financial and management resources of the mutual banking institution seeking to convert are satisfactory; and (e) the competence, character, and banking experience of the reorganizing mutual banking institution, including its record of compliance with applicable laws and regulations, are satisfactory. (2) Grounds for Disapproval of Reorganizations. The Commissioner may disapprove a proposed mutual holding company reorganization pursuant to 209 CMR 33.21 through 33.30 if: (a) disapproval is necessary to prevent unsafe or unsound practices; (b) the financial or managerial resources of the reorganizing mutual banking institution or any acquiree subsidiary banking institution warrant disapproval; (c) the proposed capitalization of the mutual holding company fails to meet the requirements of 209 CMR 33.24(3); (d) a stock issuance is proposed in connection with the reorganization pursuant to 209 CMR 33.27 that fails to meet the standards established by 209 CMR 33.27; (e) the reorganizing mutual banking institution or any acquiree subsidiary banking institution fails to furnish the information required to be included in the Reorganization 9/4/98 Plan or Application or any other information requested by the Commissioner in connection with the proposed reorganization; or 9/4/98 (f) the proposed reorganization would violate any provision of law, including (without limitation) 209 CMR 33.23 (regarding board of trustees or directors' approval and corporator or membership approval) or 209 CMR 33.25(1) (regarding continuity of membership rights). (3) Capitalization. (a) The Commissioner shall disapprove a proposal by a reorganizing mutual banking institution or any acquiree association to capitalize a mutual holding company in an amount in excess of a nominal amount if immediately following the reorganization, the resulting subsidiary banking institution or the acquiree subsidiary banking institution would fail to be "adequately capitalized" as defined under 12 CFR Part 325. (b) Proposals by reorganizing mutual banking institutions and acquiree subsidiary banking institutions to capitalize mutual holding companies shall also comply with any applicable statutes, and with regulations or policies of the Commissioner governing capital distributions by subsidiary banking institutions in effect at the time of the reorganization. (Approval of a Reorganization Plan by the Commissioner under 209 CMR 33.21 through 33.30 shall also be deemed to constitute Commissioner approval under any regulation or policy of the Commissioner governing capital distributions by subsidiary banking institutions, subject to any conditions imposed by the Commissioner.) (4) Presumptive Disqualifiers. (a) Managerial resources The factors specified in 12 CFR §574.7(g)(1)(i) through (g)(1)(vi) shall give rise to a rebuttable presumption that the managerial resources test of 209 CMR 33.24(1)(d) is not met. For this purpose, each place the term "acquiror" appears in 12 CFR § 574.7(g)(1)(i) through (g)(1)(vi), it shall be read to mean the reorganizing mutual banking institution or any acquiree subsidiary banking institution, and the reference in 12 CFR § 574.7(g)(1)(v) to filings shall be deemed to include filings under either applicable Massachusetts law or 209 CMR 33.00. References to the terms "Office of Thrift Supervision" or "Office" in 12 CFR § 574.7(g)(1)(i) through (g)(1)(vi) shall be read to mean the Commissioner or Board of Bank Incorporation if the context requires. (b) Safety and soundness and financial resources Failure by a reorganizing mutual banking institution and any acquiree subsidiary banking institution to submit a business plan in connection with a Reorganization Plan, or submission of a business plan that projects activities that are inconsistent with community credit needs and the public interest, or that fails to demonstrate that the capital of the mutual holding company will be deployed in a safe and sound manner, shall give rise to a rebuttable presumption that the safety and soundness and financial resources tests of 209 CMR 33.24(2)(a) and (2)(b) are not met.